Getting Back To Basics With Benefits

Much of what the Coronavirus (COVID-19) outbreak has taught us revolves around getting back to common sense practices we should be doing anyway:

• Wash your hands
• Keep hands away from your face, nose and eyes
• Clean and disinfect surfaces and other high use areas
• Don’t go to work when you’re sick
• Stay away from the elderly & those with underlying conditions when you’re sick (or could become sick)
• Drink plenty of fluids
• Get adequate rest

Prior to COVID-19, most would agree these recommendations to be in our best interest to follow. Unfortunately the virus has exposed areas we’ve become complacent in and because of that we can put ourselves (and others) at risk.

When it comes to benefits, plan sponsors need to be careful they too don't become complacent, e.g.:

• These are the benefits we’ve always offered
• No one else will quote us
• We’re a bad group, we have large claims
• If we leave our current arrangement they won’t take us back
• Everyone’s getting similar increases
• We should reduce benefits to lower costs
• Self-funding and other approaches are too risky
• If we join a group (i.e. trust/association), they will look out for our best interests

That said, here are some suggested practices for plan sponsors interested in combating benefits complacency:

• Align Interests With Your Representation

A critical first step is choosing your representation and ensuring their interests are aligned with yours. If not, it could significantly impact the results achieved.

By the way, do you know who controls healthcare costs in America?

• Become Strategic With Your Approach

If you make health plan decisions, no matter what your title, the Department of Labor says you have fiduciary responsibilities.

To ensure best practices get strategic with how your benefits are managed and make sure to document your processes for making all related decisions

• Don’t Follow The Crowd

Just because you’ve heard everyone’s doing it (i.e. offering a health savings account, setting up a clinic, joining a trust etc.) doesn’t mean it’s right for your plan.

More importantly, are those decisions defensible as a plan fiduciary? Going along with the crowd is not a good enough answer for making critical benefit decisions.

Find the approach that best meets your needs then select the best in market vendors to deliver those products and services

• Create More Options

Without options your ability to maintain benefits and control costs is greatly reduced. If you’ve been with the same carrier for years (and they know you’re not leaving) what incentive do they have to ensure you’re getting the best possible pricing?

Your carriers need to know you have options and could leave them (whether you do so or not is up to you)

• Don’t Accept Assumptions

Question the data (good or bad, data is critical to understanding your plan, making design changes and negotiating renewals). If you don't have access to your data how can you question assumptions the carriers have made?

At minimum, most plan sponsors (with 100+ participants) have access to an annual report that outlines how their plan was rated (it's called an underwriter's renewal report or rate work up sheet). Start with that and as you review keep in mind who the underwriter ultimately works for (hint, it’s not you)

• Don’t Confuse The Market

Shopping risk is not the same as shopping for a new home, car or TV. Having multiple representatives quote the market on your behalf only creates confusion and negatively impacts the results you may be able to achieve.

Choose your representation first then let them go to market unencumbered

• Get Educated

How can you make good decisions regarding benefits if you don’t understand the business of healthcare, the components of all health plans, who profits from the different products/services, the latest trends etc.? Take every opportunity to learn more (from reliable sources) about the #1 expense after payroll so you can make more informed decisions.

Click here for one of the best educational conferences for benefit plan sponsors.

Have Hope & Follow Good Recommendations

The good news is, after some time, we’ll get through COVID-19. How? By not being complacent and following recommendations that protect our family and friends. Additionally, lessons will be learned that will help us better deal with future global pandemics.

Same with benefits, lessons will be learned and plan sponsors will have an opportunity to evalue how their benefits behaved during the crisis-how participants were treated and whether the time has come to adjust any of their approaches.

Either way, if plan sponsors follow the guidelines for better benefits management and make decisions in strategic ways they can avoid complacency and ensure a bright outlook for their benefits.